Canada Condemns US Duties on Lumber

Canada's international trade minister condemned a U.S. decison to impose duties on Canadian softwood lumber on Friday, calling on NAFTA to decide the issue.

Pierre Pettigrew said the move will devastate the $10 billion dollar a year Canadian lumber industry.

"I am sorry that the American administration did not find the nerve to confront its protectionist softwood lumber producers," Pettigrew said.

Pettigrew said he has called for a panel of the North American Free Trade Agreement _ the U.S., Canadian and Mexican trade group _ to decide the matter and noted there is also a complaint before the World Trade Organization.

The minister said he's confident Canada will win, but a ruling could take months or years.

The U.S. government issued duties averaging 29 percent on Canadian softwood lumber to protect American jobs and retaliate for what it says are unfair trade practices.

After an investigation, the U.S. Commerce Department determined that Canada subsidizes its industry by charging low fees to log public lands and allows its producers to sell their lumber in the U.S. at below-market prices, an illegal practice known as dumping.

Canada has denied it subsidizes its industry but has offered to change some provincial timber practises to allay American fears.

Duncan Davies, president and chief executive of the Interfor lumber company, said it's "out of the question" that British Columbia coastal companies can pay duties of 29 percent on their shipments to the U.S.

"Unless we find some resolution to this (trade dispute), there's going to be a fairly significant impact on operations and employment; workers and communities are going to be significantly affected by this," Davies said.

The latest move has already forced Doman Industries Ltd. to close two of its nine mills on Friday, chief executive Rick Doman said.

Charles Tardif, president of the Quebec Lumber Manufacturers Association, said thousands could lose their jobs.

"In November and December of last year, due to the uncertainty of the market and the threat of those taxes, there were over 6,000 jobs lost temporarily. If we have an imposition of those taxes, not just temporary but permanent jobs will be lost," Tardif said.

British Columbia Forestry Minister Mike de Jong said the dispute poses a "political crisis" for Canada and the U.S.

"I presume the minister and the government will make it quite clear that it is not business as usual as far as Canada-U.S. relations are concerned," de Jong said.